Prepare for aftermath after SRDP submission

Remember that even though the whole point of the Stark Voluntary Self-Referral Disclosure Protocol (SRDP) — at least from the provider's perspective — is to settle potential Stark liabilities for less than its full exposure, the government wants to know about your entire potential liability.

Centers for Medicare & Medicaid Services (CMS) requires that the provider's submission include a full financial analysis of the "total, itemized by year, that is actually or potentially due and owing" under the Stark Law, factoring in the period of noncompliance, explains John B. Garver III, JD, an attorney in the Charlotte, NC, office of the law firm Robinson Bradshaw.

The SRDP requires financial analysis of any potentially non-compliant arrangement over the entire "look back" period, which is the period during which the disclosing party was potentially not in compliance with the Stark Law, Garver says. Thus, in some cases, the "look-back" period for calculation purposes will exceed even the Stark statute of limitations period.

"The provider's exposure under the Stark Law is therefore the sum of all Medicare reimbursements received from any and all referrals of designated health services, including all hospital services, made by any physician with which the provider had a direct or indirect financial relationship that did not meet a Stark exception," Garver says.

CMS also requires that the provider's SRDP submission list the total amount of remuneration paid by the provider to the physician as a result of the reported Stark Law violations during the applicable "look back," says Jennifer Csik Hutchens, JD, also of Garver's firm. The provider's financial analyses should be based on a clearly defined methodology and should rely on the most accurate data available, she says.

"It is imperative that CMS have confidence in the disclosure and its underlying methodology to both minimize any follow-up inquiries from CMS and set a good tone for discussions with CMS on the nature and amount of any penalties," Hutchens says.

The provider also must identify factors that might support a payment reduction, the attorneys say. While the SRDP statute does not require CMS to reduce any amounts owing or potential fines as a result of a provider's submission under the SRDP, the agency has authority to do so. CMS will consider several factors in determining whether to reduce an amount owing. Hutchens says these factors include the nature and extent of the illegal conduct, the timeliness of the disclosure, the level of cooperation of the disclosing party, and the disclosing party's financial position.

"To the extent possible, submissions should highlight any factors that support a liability reduction," she says. "For example, a rural hospital will want to emphasize that it serves a disproportionate number of underserved patients. To the extent applicable, the lack of ability to pay should be at the forefront of the argument."

Don't forget that the process isn't over — not even close — once you submit the disclosure. Following the initial submission, CMS will conduct its own verification of the submission and might request additional information and documents from the disclosing party. The disclosing party should establish a mechanism for rapidly and accurately responding to CMS' information requests, Garver says.

"A disclosing party's level of cooperation may factor into CMS' ultimate decision on the outcome, the penalty, in each case," he says. "Moreover, the disclosing party should take time to think proactively about its responses to questions that CMS may ask in its follow-up. A financially distressed hospital, for example, should have explored what documentation it will provide when CMS asks for backup as to its lack of financial wherewithal to pay a large penalty."